Logitech 2011 Annual Report Download

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Table of contents

  • Page 1
    ... et Document d'Information Geschäftsbericht 2011, Einladung und Informationsmaterial 2011 Annual Report, Invitation and Proxy Statement Des produits conçus pour les activités numériques qui vous intéressent Produkte für die digitalen Erfahrungen, die Ihnen wichtig sind Products for the...

  • Page 2
    ... of business and economic conditions or significant fluctuations in currency exchange rates; as well as those additional factors set forth in Logitech's periodic filings with the Securities and Exchange commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2011 and...

  • Page 3
    ... in FY 11 was the return to solid growth for the company as a whole, and in several of our sales regions and product categories. our Americas and Asia Pacific regions achieved record sales, delivering 28% and 37% year-over-year growth, respectively. our oeM sales also achieved double-digit growth...

  • Page 4
    ... sales growth and increased market share by expanding our distribution network to reach more customers and by designing products specifically for the china market. As an added benefit, these "designed for china products" have also performed well in other markets. FY 11 marked the first full year...

  • Page 5
    ...quarter and by execution challenges related to pricing and channel programs in the region. We are addressing the internal issues we have in eMeA and implementing changes during FY 2012. During the year Logitech launched products in the United States for a new platform called google tV, which enables...

  • Page 6
    ... in mature markets, and the rise in popularity of tablets, smartphones and internet-connected tVs, we see other evidence of how rapidly changing consumer trends are influencing Logitech's business. As the demographics of our consumer base change, we see people choosing their digital purchases with...

  • Page 7
    ...continue to build our presence in china and begin to implement plans to increase our momentum in other emerging markets, such as india, Russia and Brazil. our growing commitment to video will also be evident throughout FY 12. Video on the Pc has been an important part of Logitech's strategy for more...

  • Page 8
    ...an exciting and growing area called Unified communications (Uc). Uc is becoming increasingly important for businesses as they integrate technologies for voicemail, e-mail, chat, video conferencing and document sharing into a seamless experience for their employees. Logitech is uniquely positioned to...

  • Page 9
    ... new category. october 2, 2011 marks the 30th anniversary of Logitech. over these thirty years we have seen many shifts in technology, we have weathered tough times, and many companies have come and gone. And over these thirty years Logitech has managed to significantly grow our sales and profits...

  • Page 10
    ... and counsel. Finally, we wish to thank you, our shareholders, for your trust in us and your participation with us on this journey to connect people to what they care about in the digital world. guerrino De Luca chairman of the Board Acting President and chief executive officer 8 Logitech 2011

  • Page 11
    ... and Agenda for the Annual General Meeting 52 Questions and Answers About the Logitech 2011 Annual General Meeting 58 Agenda Proposals and Explanations 69 9 Corporate Governance and Board of Directors Matters 91 Compensation Report Annual Report 127 Management's Discussion and...

  • Page 12
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  • Page 13
    ..., la rémunération des membres du Conseil d'administration et de la direction générale de Logitech ainsi que d'autres informations utiles. Que vous puissiez participer à l'Assemblée générale ordinaire ou non, votre vote est important. Nous vous remercions du soutien continu que vous apportez...

  • Page 14
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  • Page 15
    ...au 31 mars 2011 B. Points soumis au vote 1. 2. 3. 4. 5. 6. 7. 8. Approbation du rapport annuel, du rapport de rémunération, des comptes consolidés et des comptes statutaires de Logitech International S.A. pour l'exercice 2011 Vote consultatif sur la rémunération des membres de la Direction Vote...

  • Page 16
    ... Document d'Information ainsi que les documents qui l'accompagnent vous sont adressés directement, si vos actions sont inscrites au Registre des Actions de Logitech International S.A. ou dans le sous-registre tenu par notre agent de transfert américain, The Bank of New York Mellon Corporation. Qui...

  • Page 17
    ... rapport annuel établi sur la base du formulaire 10-K pour l'exercice 2011 que nous avons déposé auprès de la U.S. Securities and Exchange Commission sont disponibles sur notre site internet à l'adresse http://ir.logitech.com. Nos actionnaires peuvent aussi obtenir sans frais des copies de ces...

  • Page 18
    ...Option 1" de la carte-réponse et à retourner cette dernière dûment complétée, signée et datée à Logitech au moyen de l'enveloppe affranchie annexée jusqu'au vendredi 26 août 2011...Logitech avant l'Assemblée et que le Registre des Actions de Logitech est inform...et que des points ne figurant ...

  • Page 19
    Qui puis-je contacter pour poser des questions? Si vous avez des questions ou besoin d'assistance pour voter vos actions, vous êtes invité à nous appeler au +1510-713-4220 ou à nous envoyer un email à l'adresse [email protected]. FRANÇAIS INFORMATIONS SUPPLEMENTAIRES POUR LES ...

  • Page 20
    ... sur la rémunération des membres de la Direction), Point 4 (augmentation du nombre d'actions disponibles selon les Plans d'Achat d'Actions des Collaborateurs), Point 5 (autorisation de détenir plus de 10% d'actions propres), Point 6 (report à nouveau du bénéfice résultant de l'exercice sans...

  • Page 21
    ... ordinaire 2011 Nos Statuts permettent à un ou plusieurs actionnaires qui représentent au moins (i) un pour-cent du capitalactions ou, si cette valeur est inférieure, (ii) des actions totalisant une valeur nominale d'un million de francs suisses, de requérir l'inscription d'un point à l'ordre...

  • Page 22
    ...la règle 14a-8 du U.S. Securities Exchange Act of 1934 (la "...million de francs suisses de demander l'inscription d'un point à l'ordre du jour d'une Assemblée générale des actionnaires peut être consultée sur notre site internet à l'adresse http://ir.logitech.com. Vous pouvez aussi contacter...

  • Page 23
    ... l'exercice se terminant le 31 mars 2011 La direction de Logitech International S.A. donnera un rapport sur les opérations de la Société pour l'exercice 2011 lors de l'Assemblée Générale ordinaire. B. POINTS DE L'ORDRE DU JOUR SOUMIS AU VOTE Point 1 Approbation du rapport annuel, du rapport...

  • Page 24
    ... de Logitech International S.A. pour l'exercice 2011. Point 2 Vote consultatif sur la rémunération des membres de la Direction Proposition ... say-on-pay est consultatif et, par conséquent, il n'engage pas le Conseil d'administration. Toutefois, ce vote nous fournira des informations concernant le ...

  • Page 25
    ... faveur de la décision consultative suivante : "La rémunération des membres de la Direction de Logitech publiée dans le Rapport de rémunération pour l'exercice 2011 y compris le chapitre "Compensation Discussion and Analysis", les tableaux résumant les rémunérations, les notes ainsi que les...

  • Page 26
    ...Direction de Logitech. En particulier, le Conseil d'administration demande aux actionnaires s'ils pensent que les futures votes consultatifs sayon-pay tels que celui qui est prévu au point...dans le cadre du Plan d'Achat d'Actions des Collaborateurs (américains) de 1996 et du Plan d'Achat d'Actions ...

  • Page 27
    ... (non américains) de 2006 (le "Plan de 2006" et, collectivement avec le Plan de 1996, les "Plans d'Achat d'Actions", sont disponibles sous forme d'annexes à notre formulaire S-8 POS qui a été déposé auprès de la Securities and Exchange Commission le 30 janvier 2009, et qui peut être consult...

  • Page 28
    ... Plans d'Achat d'Actions si, immédiatement après cette acquisition, ils détiendraient (directement ou indirectement) des actions qui, ajoutées aux actions qu'ils pourraient acheter par l'exercice d'options existantes, représenteraient 5% ou plus du pouvoir de vote combiné des actions Logitech...

  • Page 29
    ... dans le cadre des Plans d'Achat d'Actions, sauf par succession pour cause de mort. Tout transfert de tels droits sera considéré comme étant invalide. Retrait Pendant une période d'offre, les participants peuvent se retirer des Plans d'Achat d'Actions en informant Logitech. En cas de retrait...

  • Page 30
    ...fices des Plans d'Achat d'Actions dépendront d'une part de la volonté des employés d'y participer et, d'autre part, de la fair market value de nos...38. Le prix de la dernière transaction relative aux actions Logitech effectuée le 30 juin 2011 au NASDAQ était de $11.24. Nombre d'actions acheté...

  • Page 31
    ...Plans d'Achat d'Actions. Point 5 Autorisation de détenir plus de 10% d'actions propres Proposition Le Conseil d'administration propose aux actionnaires d'autoriser Logitech...limites...de dommage causé à ...acquisition, et requerrait l'ouverture d'une seconde ligne de négoce auprès du SIX Swiss Exchange...

  • Page 32
    ...." Point 6 Report à nouveau du bénéfice résultant du bilan sans paiement de dividende Proposition Le Conseil d'administration propose de ne pas verser de dividende sur la base du bénéfice réalisé pour l'exercice 2011 et que le bénéfice de CHF 507'730'000 (US $ 609'449'000 au taux de change...

  • Page 33
    ... voix représentées par Logitech. Recommandation Le Conseil d'administration recommande de voter en faveur de la proposition de donner décharge aux membres du Conseil d'administration et de la Direction pour leur activité pendant l'exercice 2011. Point 8 Elections au Conseil d'administration Le...

  • Page 34
    ... d'avril 2011. Antérieurement, il était Executive Vice President de Nestlé S.A., Chief Executive Officer de Nestlé Nutrition et membre du Comité exécutif de Nestlé jusqu'au mois d'août 2010. Il a rejoint Nestlé en avril 2005 en qualité de Deputy Executive Vice President, Corporate Business...

  • Page 35
    ... en 1988. Des informations sur les honoraires que Logitech a payés à PricewaterhouseCoopers S.A., ainsi que d'autres informations concernant PricewaterhouseCoopers S.A., figurent sous la rubrique "Independent Public Accountants" et "Report of the Audit Committee" de la version anglaise de cette...

  • Page 36
    ... invités à vous référer à la version anglaise de cette Invitation et Document d'Information pour davantage d'informations sur notre Conseil d'administration et consulter notre rapport de rémunération pour 2011. La version anglaise de cette Invitation et Document d'Information fait foi en cas...

  • Page 37
    ...An unsere Aktionärinnen und Aktionäre: Sie sind herzlich eingeladen, an der ordentlichen Generalversammlung 2011 der Logitech International S.A. teilzunehmen. Die Versammlung findet am Mittwoch, 7. September 2011 um 14:30 Uhr im Palais de Beaulieu, Saal Rom, in Lausanne, Schweiz, statt. Beiliegend...

  • Page 38
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  • Page 39
    ...äge 1. 2. Genehmigung des Jahresberichtes, des Entschädigungsberichtes, der Konzernrechnung und der Jahresrechnung der Logitech International S.A. für das Geschäftsjahr 2011 Konsultative Abstimmung über die Managementvergütung 3. Konsultative Abstimmung über die Häufigkeit der zukünftigen...

  • Page 40
    ...an der Versammlung stimmberechtigt? Aktionäre, die im Aktienregister der Logitech (einschliesslich dem Unterregister bei "The Bank of New York Mellon Corporation", Logitechs amerikanischer Vermittlungsstelle) am Donnerstag, 1. September 2011, eingetragen sind, geniessen das Stimmrecht. Zwischen dem...

  • Page 41
    ...in Fremont, California 94555, 6505 Kaiser Drive. Logitechs Telefonnummer in ...Report Formular 8-K am Dienstag, 13. September 2011, an die Securities and Exchange Commission der Vereinigten Staaten von Amerika übermitteln. Eine Kopie des Formulars 8-K wird auf unserer Website unter http://ir.logitech...

  • Page 42
    ..., wählen Sie Option 1 auf der Antwortkarte, die Sie anschliessend im beiliegenden Umschlag vor dem 26. August 2011 an Logitech zurück senden....Stimminstruktionen nicht befolgt. Wer Aktien nach der Schliessung des Registers am Donnerstag, 1. September 2011 erwirbt, wird frühestens an dem auf die ...

  • Page 43
    ...Sie Ihr Stimmmaterial auf dem Internet finden und wie Sie uns Anweisung erteilen können, wohin zukünftiges Stimmmaterial per Email gesandt werden soll. DEUTSCH Wenn...15. Juli und dem 24. August 2011 durchgeführt wird. Der 24. August 2011 ist für Logitech das letztmögliche Datum zur Durchführung...

  • Page 44
    ...Sie sich vertreten lassen. Sie können Ihre Instruktionen über das Internet, per Post oder per Telefon weitergeben, wie dies in der ... von mehr als 10 %), Antrag 6 (Vortrag des Bilanzgewinns des Geschäftsjahres 2011 ohne Ausschüttung einer Dividende), und Antrag 8 (Wahlen in den Verwaltungsrat)....

  • Page 45
    ... weiterzugeben. Wenn Sie Ihre Logitech Aktien über eine Bank ...sei es schriftlich, per Telefon, Email oder auf sonstige Weise, ihnen...2011 Gemäss unseren Statuten haben ein oder mehrere Aktionäre, die zusammen ein Prozent unseres ausgegebenen Aktienkapitals oder einen Nominalwert von einer Million...

  • Page 46
    ... ist beim Sekretär des Verwaltungsrates der Logitech am Verwaltungssitz in der Schweiz oder in... Securities Exchange Act von 1934 erfüllen, dem Verwaltungsrat Vorschläge für die Generalversammlung 2011 einreichen... oder einen Nominalwert von einer Million Franken vertreten, berechtigt sind, ...

  • Page 47
    ... Logitech International S.A. für das Geschäftsjahr 2011 Antrag...Swiss Exchange Richtlinie über Corporate Governance. Der Entschädigungsbericht ist in dieser Einladung enthalten. Kopien des Geschäftsberichtes und der Einladung mit Informationsmaterial sind auf dem Internet auf http://ir.logitech...

  • Page 48
    ... der Logitech International S.A. für das Geschäftsjahr 2011 zu genehmigen. Antrag 2 Konsultative Abstimmung über die Managementvergütung Antrag Der Verwaltungsrat beantragt, dass die Aktionäre im Rahmen einer konsultativen Abstimmung die Vergütung des Managements von Logitech, wie...

  • Page 49
    ...dafür ist, warum ausgezeichnete leitende Angestellte oder Mitarbeitende sich für Logitech entschliessen und auch bleiben, oder warum sie grossen Einsatz zeigen ...ädigungsberichts bis vor das Kapitel "Summary Compensation Table for Fiscal Year 2011." DEUTSCH Notwendige Mehrheit zur Genehmigung Der ...

  • Page 50
    ... unter den Erwerbsplänen für Mitarbeitende erworben werden können (1996 Employee Share Purchase Plan (U.S.) und 2006 Employee Share Purchase Plan (Non-U.S.)) um 5 Millionen Aktien zu erhöhen. Erläuterung Logitechs Aktienerwerbspläne ermutigen die Mitarbeitenden zum Aktienerwerb und bringen die...

  • Page 51
    ...den ESPPs per September 2011 ...Neue Aktien, wenn der Antrag auf Erhöhung angenommen wird ...Maximum an Aktien, die unter den ESPPs erworben werden können...Hintergrund der Aktienerwerbspläne der Logitech-Gruppe 16.0 million (15.1 million) 0.9 million 5.0 million 5.9 million Der 1996 ESPP wurde...

  • Page 52
    ...sieben Tage vor dem Beginn der Angebotsperiode). Am 24. Juni 2011 waren annähernd 2,870 Mitarbeitende zur Beteiligung an den Erwerbsplänen...ausgegeben. Der Kaufpreis für eine Angebotsperiode ist 85 % des Markwertes der Logitech Aktien am ersten Tag der Angebotsperiode oder 85 % des Marktpreises der...

  • Page 53
    ...ckziehen. Sie benachrichtigen Logitech in diesem Sinne....Recht zur Beteiligung am Plan in der laufenden ... die Höhe dieser Bezüge, welche das Management und die übrigen Angestellten im Falle einer Annahme... der Marktwert dieser Aktien am 31. März 2011 aufgeführt. Der Marktwert pro soeben erwähnte...

  • Page 54
    ... und dem Marktwert der Aktien am Tag des Kaufs (der letzte Tag einer Angebotsperiode) als ordentliches Einkommen besteuert und dieser Betrag kann bei Logitech von der Steuer abgesetzt werden. Der Überschuss, wenn sich einer ergibt, des Verkaufserlöses über dem Marktwert der Aktien am Tag ihres...

  • Page 55
    ... Swiss Exchange...Managements von Logitech sowie von Logitech...2010 - Dividende ...Release from die Reserve für eigene Aktien ...Nettogewinn des Geschäftsjahres 2011...Gewinnvortrag zur Verfügung der Generalversammlung zum Ende des Geschäftsjahres 2011 ... CHF 349,312 - CHF CHF 138,205 CHF 20,213 CHF...

  • Page 56
    ... Beschluss der Generalversammlung zu unterbreiten. Der zur Verfügung der Generalversammlung 2011 stehende Gewinn besteht aus den kumulierten Gewinnen der Logitech International S.A., der Holdinggesellschaft der Logitech-Gruppe. Der Verwaltungsrat ist weiterhin davon überzeugt, dass es im besten...

  • Page 57
    ...tigkeit im Geschäftsjahr 2011. Antrag 8 Wahlen ... Code of Best Practice für Corporate ... Amt anzunehmen. Für weitere Information über den Verwaltungsrat, einschliesslich...Bousquette trat als Senior Vice President Marketing im Dezember 1993 ...der University of Michigan. Er ist 52 ...

  • Page 58
    ...Marketing. Herr Bousquette ist zum gegenwärtigen Zeitpunkt Mitglied des Audit Committee und Vorsitzender des Compensation...Executive Vice President CEO von Nestlé Nutrition. Im Jahre 2008 wurde er zum Executive Vice President ernannt. Seit Januar 2011... Boston University in der...Logitech International...

  • Page 59
    .... Informationen über die Honorare, die Logitech an PricewaterhouseCoopers AG bezahlt hat, sowie weitere Information über PricewaterhouseCoopers S.A. entnehmen Sie dem untenstehenden Abschnitt unter dem Titel "Independent Public Accountants" und "Report of the Audit Committee". Ein Mitglied der...

  • Page 60
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  • Page 61
    ... on how you can exercise your voting rights, information concerning Logitech's compensation of its Board members and executive officers and other relevant information. Whether or not you plan to attend the Annual General Meeting, your vote is important. Thank you for your continued support of...

  • Page 62
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  • Page 63
    ... statements of Logitech International S.A. for fiscal year 2011 Advisory vote on executive compensation Advisory vote on the frequency of future advisory votes on executive compensation Increase to the number of shares available for issuance under Employee Share Purchase Plans Authorization to...

  • Page 64
    QUESTIONS AND ANSWERS ABOUT THE LOGITECH 2011 ANNUAL GENERAL MEETING GENERAL INFORMATION FOR ALL SHAREHOLDERS Why am I receiving this "Invitation and Proxy Statement"? This document is designed to comply with both Swiss corporate law and U.S. proxy statement rules. Outside of the U.S. and Canada ...

  • Page 65
    ... year 2011 filed with the U.S. Securities and Exchange Commission are available on our website at http://ir.logitech.com. Shareholders also may request free copies of these materials at our principal executive offices in Switzerland or the United States, at the addresses and phone numbers above...

  • Page 66
    ... by the Board of Directors. Who can I contact if I have questions? If you have any questions or need assistance in voting your shares, please call us at +1-510-713-4220 or e-mail us at [email protected]. FURTHER INFORMATION FOR U.S. OR CANADIAN "STREET NAME" BENEFICIAL OWNERS Why did I receive...

  • Page 67
    ...shareholders' meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect...

  • Page 68
    ... as professional asset managers, are obliged to inform Logitech of the number and par value of the registered shares they represent. Meeting Proposals There are no other matters that the Board intends to present, or has reason to believe others will present, at the Annual General Meeting. If other...

  • Page 69
    ... an aggregate par value of one million Swiss francs to demand that an item be placed on the agenda of a meeting of shareholders are available on our website at http://ir.logitech.com. You may also contact the Secretary of Logitech at our principal executive office in either Switzerland or the United...

  • Page 70
    ... of Logitech's auditors, the report of the statutory auditors and additional information on the Company's business, organization and strategy, and information relating to corporate governance as required by the SIX Swiss Exchange directive on corporate governance. The Compensation Report forms part...

  • Page 71
    ...'s named executive officers disclosed in Logitech's Compensation Report for fiscal year 2011. Explanation At Logitech's 2009 and 2010 Annual General Meetings, the Logitech Board of Directors voluntarily asked shareholders to approve Logitech's compensation philosophy, policies and practices, as set...

  • Page 72
    ...in the Compensation Report included in the Annual Report and this Invitation and Proxy Statement. Logitech's compensation philosophy, compensation components for employees below the executive level, compensation program risks and design, and compensation paid during fiscal year 2011 are also set out...

  • Page 73
    ... on executive compensation. The alternative receiving the greatest number of votes (every one, two or three years) will be considered the frequency selected by shareholders. Proposal 4 Increase to the Number of Shares Available for Issuance under Employee Share Purchase Plans Proposal The Board of...

  • Page 74
    ... plan for employees based outside of the United States by action of the Board of Directors on June 15, 2006. Under the ESPPs employees may purchase shares twice a year at the end of each six-month offering period. The purchase price is 85% of the market value of Logitech shares on the first day...

  • Page 75
    ... to participate and the fair market value of our shares at various future dates, it is not possible to determine the benefits that will be received by executive officers and other employees if the share increase for the ESPPs is approved by shareholders. Non-employee directors are not eligible to...

  • Page 76
    sets forth, for the persons or groups listed, (a) the total number of shares purchased under the ESPPs during the last fiscal year, and (b) the market value of these shares as of March 31, 2011. The price per share determined as described above was $13.38. The last reported trade price for the ...

  • Page 77
    ... under its stock repurchase program, it may soon accumulate shares in treasury approaching 10 percent of its issued capital. In order to provide the Company with continued greater flexibility in the management of its capital, the Board of Directors seeks authorization to cause the Company to hold...

  • Page 78
    ... of Logitech International S.A., the Logitech parent holding company. The Board of Directors continues to believe that it is in the best interests of Logitech and its shareholders to retain Logitech's earnings for future investment in the growth of Logitech's business, for share repurchases, and...

  • Page 79
    ... Annual General Meeting, registered shareholders at the meeting or represented at the meeting by the Independent Representative or third parties may vote either for: (1) a substitute nominee designated by the present Board to fill the vacancy; or (2) another substitute nominee. Under Swiss law Board...

  • Page 80
    ... University. He is 55 years old and is a dual U.S. and Swiss citizen. As chief executive of a significant public company, and a former senior executive at one of the world's bestknown consumer products companies, with significant experience in business strategy and marketing, Mr. Laube brings senior...

  • Page 81
    ...as by-laws). The Board makes resolutions through a majority vote of the members present at the meetings. In the event of a tie, the vote of the Chairman decides. Logitech's Articles of Incorporation set the minimum number of directors at three. We had ten members of the Board of Directors as of June...

  • Page 82
    ... equipment and approximately $1.5 million of Logitech computer peripherals, and Logitech purchased less than $10,000 of BT communication services in fiscal year 2011. Neither Ms. Davis nor any Logitech executive officer had any direct involvement in these transactions. In each case, the Board...

  • Page 83
    Erh-Hsun Chang ...62 Years Old Director since 2006 Former Senior Vice President, Worldwide Operations and General Manager, Far East, Logitech Taiwan national Erh-Hsun Chang has been a member of the Board of Directors since June 2006. Until April 2006 Mr. Chang was the Company's Senior Vice ...

  • Page 84
    ...knowledge, provides the Board with expertise in senior leadership, technology, product strategy, and financial management. Guerrino De Luca ...58 Years Old Director since 1998 Chairman of the Board of Directors, acting President and Chief Executive Officer of Logitech International S.A. Italian and...

  • Page 85
    ... as a member of the senior leadership of a leading digital delivery company, provides the Board with expertise in technology, product strategy, and senior leadership. Richard Laube ...55 Years Old Director since 2008 Chief Executive Officer, Nobel Biocare Holding A.G. Swiss and U.S. national...

  • Page 86
    ... and Chief Executive Officer, served as a member of the Board of Directors from September 2008 until July 2011. He served as President and Chief Executive Officer from January 2008 to July 27, 2011. Mr. Quindlen joined Logitech as Senior Vice President, Worldwide Sales and Marketing in October...

  • Page 87
    ... to the Board of Directors, Logitech International S.A., Rue du Sablon 2-4, 1110 Morges, Switzerland, or c/o Logitech Inc., 6505 Kaiser Drive, Fremont, CA 94555, USA. Under the Company's Articles of Incorporation only registered shareholders are recognized as shareholders of the company. As a result...

  • Page 88
    ...important because it assists our directors in understanding, advising, and overseeing Logitech's structure, financial reporting, and internal control of such activities. Industry and Technical Expertise. Because we develop and manufacture hardware and software products, ship them worldwide, and sell...

  • Page 89
    ...and the approval of the sale or acquisition, including related borrowings, of the Company's real estate. The Board of Directors has delegated the management of the Company to the Chief Executive Officer and the executive officers, except where Swiss law or the Company's Articles of Incorporation or...

  • Page 90
    ... and medium term strategies; preparing the budget, which must be approved by the Board of Directors; reviewing and certifying the Company's annual report; appointing, dismissing and promoting any employees of Logitech other than executive officers and the head of the internal audit function; taking...

  • Page 91
    ... oversees issues related to the design and risk controls of compensation programs. The Audit Committee oversees issues related to internal control over financial reporting and Logitech's risk tolerance in cash-management investments. The Board's role in oversight does not have a direct impact on...

  • Page 92
    ... agenda. The Board Committee members receive materials in advance of Committee meetings allowing them to prepare for the meeting. The Charters of each Board Committee are available on Logitech's Investor Relations website at http://ir.logitech.com. Each of the Audit, Compensation and Nominating...

  • Page 93
    ... "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's annual reporting, and recommends that the Board of Directors submit these items to the shareholders' meeting for approval. ENglISH • reviews the adequacy of the Company's internal...

  • Page 94
    ...Vice President of Internal Audit. Compensation Committee The Compensation Committee reviews and approves, or recommends to the Board for approval, the compensation of executive officers and Logitech's compensation policies and programs, including share-based compensation programs and other incentive...

  • Page 95
    ... Board of Directors. COMMUNICATIONS WITH THE BOARD OF DIRECTORS Shareholders may contact the Board of Directors about bona fide issues or questions about Logitech by sending an email to [email protected] or by writing the Corporate Secretary at the following address: Logitech International...

  • Page 96
    ... owner listed in this table is c/o Logitech International S.A., Rue du Sablon 2-4 Morges, Switzerland / 6505 Kaiser Drive, Fremont, California 94555. Each director or executive officer has sole voting and investment power over the shares reported in accordance with SEC rules, subject to community...

  • Page 97
    ... to do so. The Compensation Committee adopted share ownership guidelines for executive officers and other officers who report directly to the CEO effective September 2008. These guidelines require the CEO to hold a number of Logitech shares with a market value equal to 3 times his annual base salary...

  • Page 98
    ... audit mandate for Logitech in 1988. They were re-elected by the shareholders as Logitech's auditors at the Annual General Meeting in September 2010. For purposes of U.S. securities law reporting, PricewaterhouseCoopers LLP, San Jose, California, serves as the Company's independent registered public...

  • Page 99
    ..., the audit of our internal control over financial reporting, and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings. Audit-related fees. This category represents consultation on issues such as acquisition accounting, due...

  • Page 100
    ... must communicate all services approved at the next scheduled Audit Committee meeting. The Audit Committee or its delegate can pre-approve types of services to be performed by PwC with a set dollar limit per type of service. The Vice President, Corporate Controller or Acting Corporate Controller is...

  • Page 101
    ...the effectiveness of Logitech's internal control over financial reporting. The Board of Directors has adopted a written charter for the Audit Committee. A copy of the Charter can be found on our website at http://ir.logitech.com. To view the charter, select "Audit Committee Charter" under "Corporate...

  • Page 102
    ... on February 2, 2011 to report the exercise of options and the sale of 28,750 shares on July 30, 2010. A late Form 4 report was filed for Junien Labrousse on April 13, 2011 to report the sale on his behalf on February 1, 2011 of 747 shares acquired under the Company's Employee Share Purchase Plan on...

  • Page 103
    ... to Logitech's named executive officers and its Board members. This Compensation Report has been designed to comply with the proxy statement rules under U.S. securities laws as well as Swiss regulations and best corporate governance practices. This Report is an integrated part of our Annual Report...

  • Page 104
    ... while still delivering similar grant-date award value. No Vesting of Prior PSUs. While Logitech did return to double-digit growth in revenue and operating income in fiscal year 2011, our TSR underperformed. As a result, named executive officers received no shares, and therefore no actual delivered...

  • Page 105
    ... by a "change in control" of Logitech. Logitech does not provide special retirement benefits designed solely for executive officers. ENglISH In addition, Logitech has been a leader in providing our shareholders the ability to cast advisory votes on compensation. Beginning in 2009, Logitech...

  • Page 106
    ... measures that correlate closely with increases in shareholder value. Accordingly, the majority of our executive compensation is at-risk, including the annual performance-based cash bonus and the majority of our long-term equity incentive awards. Our CEO and other executive officers have a higher...

  • Page 107
    ... to driving long-term shareholder value. The Bonus Plan is designed to motivate and reward executives for above-target performance. These annual performance-based bonuses represent a significant portion of each executive's yearly cash compensation, ranging from 40%-60% of annual targeted cash...

  • Page 108
    ... Accounting Principles (GAAP). Operating Income/ Contribution Margin For all named executive officers, the 2011 Bonus Plan goals were set equal to Logitech's annual business plan for fiscal year 2011 as approved by the Board in May 2010. In addition to 50% of bonus being tied to Logitech's annual...

  • Page 109
    ... the Bonus Plan in fiscal year 2011 for our named executive officers are provided in the following table: Minimum Maximum Performance Performance Performance Actual Target Target Target Achievement Funding ($s in millions) ($s in millions) ($s in millions) ($s in millions) Percentage Participant...

  • Page 110
    ... year 2009 in part to align Logitech's equity compensation for executives more closely with the peer group, but most importantly to further align the interests of executive officers with shareholders. The PSUs are intended to Link compensation to key financial metrics of growth and profitability...

  • Page 111
    ... cost effective balance of incentive and risk than stock options. Long-term equity incentive awards granted in fiscal year 2011 During fiscal year 2011 the target value of long-term equity incentive awards granted to Logitech's named executive officers was determined by the Compensation Committee...

  • Page 112
    ... compensation consultant. The following table illustrates the number of shares subject to equity awards granted to each named executive officer in fiscal year 2011 and 2010, and their grant date fair values, which represent their accounting cost to Logitech. Fiscal year 2011 grant date fair values...

  • Page 113
    ..., if they occur, is based on the activity which generated the need for the meeting or the consent, not Logitech's share price. In fiscal year 2011 grants were made to new hires and promoted employees below the executive officer level through regularly scheduled monthly written consents of the...

  • Page 114
    ... executive officers' compensation without the presence of the Chairman or CEO. The fiscal year 2011 executive officer compensation proposals for base salary, bonus targets and equity grant values were developed by Fred Cook and presented to both the Compensation Committee and Logitech's management...

  • Page 115
    ... the list remained appropriate for Logitech for fiscal year 2011 executive compensation. For fiscal year 2011, the peer companies consisted of: 3Com Corporation Activision Blizzard, Inc. Agilent Technologies, Inc. Advanced Micro Devices, Inc. Autodesk, Inc. BMC Software, Inc. Brocade Communications...

  • Page 116
    ... cash of a life insurance contract on his life held by the Company in connection with a change to the funding of the Logitech Inc. deferred compensation plan. The Committee did not otherwise award any discretionary bonuses in fiscal year 2011. Deferred compensation plan Executive officers based in...

  • Page 117
    ... impact on shareholders, and market practices. Perquisites Logitech's executive officer benefit programs are substantially the same as for all other eligible employees except as set out below. Mr. Quindlen was provided with personal tax preparation services in fiscal year 2011. Expenses related to...

  • Page 118
    ...in the Logitech Employee Share Purchase Plans. OTHER COMPENSATION POLICIES Derivatives We do not permit any Company insiders, including officers and directors, to trade in puts, calls, warrants or other derivative Logitech securities traded on an exchange or in any other organized securities market...

  • Page 119
    ... Section 162(m) of the U.S. Tax Code in setting and determining executive officer long-term equity incentive award grants and in setting short-term cash incentive award compensation. The Logitech International S.A. 2006 Stock Incentive Plan approved by our shareholders in 2006 permits certain grants...

  • Page 120
    ...contribution to Logitech by the employee's manager and the Company's human resources department. The Compensation Committee of the Board provides oversight of compensation below the executive level, reviews the yearly short-term incentive program design and performance measures, reviews and approves...

  • Page 121
    ... Stock Incentive Plan. Management Performance Bonus Plan. Profit Sharing Plan. Sales commissions plans. Change of Control Severance Agreements in place with executive officers. The review included a consideration of compensation risk areas associated with Logitech's current compensation programs...

  • Page 122
    ... of this Compensation Report with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Logitech's 2011 Invitation and Proxy Statement and Annual Report. Compensation Committee...

  • Page 123
    ... the compensation and benefits earned during fiscal years 2011, 2010, and 2009 by our named executive officers. For more information, please refer to "Compensation Disclosure and Analysis," as well as "Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table." Changes...

  • Page 124
    ... "All Other Compensation." The Compensation Committee approved the payment of this bonus to Mr. Heid to enable him to purchase a value of Logitech shares equal to what he would have purchased under the Logitech Employee Share Purchase Plan for the February 1 - July 31, 2009 offering period but for...

  • Page 125
    ... FY11 during which he was employed in Switzerland, which are available to all of our regular employees who are on our Swiss payroll. In the case of Mr. Quindlen, represents the cost to Logitech for Mr. Quindlen's travel to and from Logitech's offices in California from his residence. In the case of...

  • Page 126
    ... named executive officers during fiscal year 2011. For more information, please refer to "Compensation Disclosure and Analysis." All Other Stock Awards: Estimated Future Payouts Number of Under Equity Incentive Shares of Grant Plan Awards (3) Stock Date Fair Threshold Target Maximum or Units Value...

  • Page 127
    ... for stock options is calculated by taking the difference between the closing price of Logitech shares on NASDAQ on the last trading day of the fiscal year ($18.13 on March 31, 2011) and the option exercise price, and multiplying it by the number of outstanding options. Market value for stock awards...

  • Page 128
    ... Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) Name Number of Number of Number Securities Securities of Shares Underlying Underlying Option Market or Units of Unexercised Unexercised Exercise Option Value of Stock That Grant Date Options...

  • Page 129
    ... in Logitech's Swiss Employee Pension Fund, which is a program offered to all eligible Swiss employees. The following table sets forth the estimated present value of accumulated pension benefits: Number of Years of Credited Service (#) Present Value of Accumulated Benefit ($)(1) Name Plan Name...

  • Page 130
    ... or Change in Control." NON-QUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR 2011 The following table sets forth information regarding the participation by our named executive officers in the Logitech Inc. U.S. Deferred Compensation Plan during fiscal year 2011 and at fiscal year-end. Executive...

  • Page 131
    ... the executive's annual and quarterly bonuses for the fiscal year preceding the fiscal year in which severance benefits become payable to the executive. • The change of control agreement defines the term "change of control" to mean A merger or consolidation of Logitech with another corporation...

  • Page 132
    ...an amount equal to his current annual base salary; his current annual targeted bonus amount; plus the payment of health insurance benefits for up to 12 months. Logitech expects to make these payments in connection with Mr. Quindlen's departure from the Company effective July 27, 2011. "Cause" in Mr...

  • Page 133
    ... the value of accelerated equity in the tables below was the closing price of Logitech's shares on NASDAQ on March 31, 2011, the last business day of the fiscal year, of $18.13. For those unvested options held by Mr. De Luca that have exercise prices denominated in Swiss Francs, the U.S. Dollar...

  • Page 134
    ... the number of RSUs to be granted annually based on a fixed market value. These changes were made in response to general industry trends with regard to board compensation. Directors who are Logitech employees do not receive any compensation for their service on the Board of Directors. Non-employee...

  • Page 135
    ... non-employee directors. The RSUs granted in fiscal year 2010 and 2011 fully vest on approximately the one-year anniversary date of the grant. Market value for stock options is calculated by taking the difference between the closing price of Logitech shares on NASDAQ on the last trading day of...

  • Page 136
    Outstanding Equity Awards for Non-Employee Directors at Fiscal 2011 Year-End Option Awards Stock Awards Number of Number of Number of Shares or Securities Securities Units of Market Value of Option Market Underlying Underlying Exercise Value of Stock That Shares or Units of Unexercised Unexercised ...

  • Page 137
    ... remain outstanding for periods not to exceed ten years. Options were granted at exercise prices of at least 100% of the fair market value of the shares on the date of grant. Logitech made no grants of restricted shares, stock appreciation rights or stock units under the 1996 Plan. No further awards...

  • Page 138
    ...worldwide plan until the adoption of the 2006 ESPP in June 2006. Under both plans, eligible employees may purchase shares with up to 10% of their earnings at the lower of 85% of the fair market value at the beginning or the end of each six-month offering period. Purchases under the plans are limited...

  • Page 139
    MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 127 ANNUAl REPORT

  • Page 140
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  • Page 141
    ..., video communications services, and digital video security systems for a home or small business. Our digital music products include speakers, earphones, and custom in-ear monitors. For home entertainment systems, we offer the Harmony line of advanced remote controls, Squeezebox wireless music...

  • Page 142
    ... markets or new categories, including the China market, tablet peripherals, video communications and UC (unified communications), which is the integration of enterprise-class collaboration and communications solutions such as voice mail, e-mail, chat, presentation sharing and live video meetings...

  • Page 143
    ... poor execution of pricing and channel programs in Europe. OEM sales increased 13% in fiscal year 2011 compared with fiscal year 2010, and OEM units sold increased 9%, primarily due to increased keyboard sales. Sales of LifeSize Communications products were 6% of total net sales in fiscal year 2011...

  • Page 144
    ... and sales and marketing to stimulate and support future growth. In October 2010, we introduced our Logitech Revue and related peripherals for the Google TV platform in the United States. Logitech Revue is a companion box for Google TV software that incorporates Logitech's Harmony remote control...

  • Page 145
    ... across our supply chain and a favorable shift in product mix towards products with higher margins. Our gross margin for fiscal year 2011 would have been higher but for the weak profitability in our EMEA retail region in the fourth quarter. Logitech is incorporated in Switzerland but operates...

  • Page 146
    ... retail customers, and with certain indirect partners, allowing customers to receive a credit equal to a set percentage of their purchases of the Company's products, or a fixed dollar credit for various marketing programs. The objective of these programs is to encourage advertising and promotional...

  • Page 147
    ... based on the share market price on the date of grant. For stock options and restricted stock assumed by Logitech when LifeSize was acquired, the grant date used to estimate fair value is deemed to be December 11, 2009, the date of acquisition. Compensation expense for awards granted or assumed...

  • Page 148
    ..., related tax effects and the selection of an appropriate fair value model. We estimate expected share price volatility based on historical volatility using daily prices over the term of past options, RSUs or purchase offerings, as we consider historical share price volatility as most representative...

  • Page 149
    ...We calculate the Company's fair value based on the present value of projected cash flows using a discount rate determined by management to be commensurate to the risk inherent in the Company's current business model. To date, we have not recognized any impairment of goodwill. Logitech bases its fair...

  • Page 150
    ... is effective prospectively for business combinations with an acquisition date on or after the beginning of the first annual reporting period after December 15, 2010. We will adopt this guidance for acquisitions beginning in fiscal year 2012. Results of Operations Net Sales Net sales by channel for...

  • Page 151
    ...benefitted from the launch of Logitech Revue in October 2010. Americas region retail sales in fiscal year 2010 were essentially flat compared with 2009, reflecting modest economic stability in the region, although sales of pointing devices, keyboards and desktops, and remotes increased. Total retail...

  • Page 152
    ...our advanced Harmony Remote controls, Logitech Revue with Google TV, and peripherals associated with the Google TV platform. Net sales reflect accruals for product returns, cooperative marketing arrangements, customer incentive programs and pricing programs. Retail Pointing Devices Retail unit sales...

  • Page 153
    ... 2011 was due in part to our video security products, which were negatively affected in fiscal year 2010 by the product transition to our new Logitech Alert HD digital video security system, which was launched in August 2010. Sales in dollars increased 17%, 13% and 9% in the Asia Pacific, Americas...

  • Page 154
    ... of intangible assets. The improvement in the gross margin percentage in fiscal years 2011 over 2010 and 2009 was primarily related to a favorable shift in retail product mix towards products with higher margins, operational efficiencies in our supply chain costs, and lower obsolescence write-downs...

  • Page 155
    ... 2009, increased advertising and marketing expenses related to promotional campaigns for Harmony and Logitech Revue, and increased investment in areas which we believe represent future growth opportunities. Fiscal year 2010 included $6.6 million in transactions costs related to the acquisition...

  • Page 156
    ... 2010. Decreases in travel and infrastructure expenses in fiscal year 2010 were partially offset by $6.6 million in transaction costs related to the acquisition of LifeSize. If foreign currency exchange rates had been the same in fiscal years 2011 and 2010, the percentage change in constant dollar...

  • Page 157
    ...-related activities during fiscal years 2011, 2009 and 2010 (in thousands). Contract Termination Costs Total Termination Benefits Asset Impairments Other Balance at March 31, 2008 ...Charges...Cash payments ...Charges against assets ...Other...Foreign exchange ...Balance at March 31, 2009...

  • Page 158
    ... for fiscal years 2011, 2010 and 2009 were as follows (in thousands): Change % 2011 vs 2010 vs 2010 2009 Year Ended March 31, 2011 2010 2009 Foreign currency exchange gains, net ...Investment income (loss) related to management deferred compensation plan ...Gain on sale of building ...Write-down...

  • Page 159
    ... activities, including $43.0 million for investments in tooling, computer hardware and software, and equipment. Net cash provided by financing activities was $46.4 million, primarily from the proceeds of employee stock purchases and the exercise of stock options. At March 31, 2011, we had cash and...

  • Page 160
    ...365.3 million in 2010 and $200.6 million in 2009. The decrease in 2011 was the result of higher accounts receivable and inventory balances, due to increased sales, higher DSO, and inventory of the new Logitech Revue product, and smaller increases than fiscal year 2010 in accounts payable and accrued...

  • Page 161
    ...was lower in fiscal years 2011 and 2010 compared with 2009 as we focused our cash outlays on critical capital needs. In December 2010, we surrendered the Company-owned life insurance contracts held in a Rabbi Trust representing investments of a management deferred compensation plan offered by one of...

  • Page 162
    ... years 2011, 2010 and 2009, we received proceeds from the sale of 4.0 million, 3.1 million and 3.1 million shares upon exercise of employee stock options and share purchases under our stock plans. In addition, cash was provided in each of those fiscal years from tax benefits on the exercise of share...

  • Page 163
    ... the methodology used by corporate taxpayers to apportion income to California and modifies the large corporate underpayment penalty effective for our fiscal years ending March 31, 2011 and 2012. Although the Company has significant operations in California, we believe these changes will not have...

  • Page 164
    ... that the unrecognized tax benefits would materially change in the next twelve months. Obligation for Management Deferred Compensation At March 31, 2011, we had $13.1 million in liabilities related to a management deferred compensation plan offered by one of the Company's subsidiaries. As specific...

  • Page 165
    ... of the three guarantee arrangements is limited to $30.0 million in total. The third guarantee is limited to purchases of specified components from the named suppliers. We do not believe, based on historical experience and information available as of the date of this report, that it is probable that...

  • Page 166
    ... of the Logitech brand through targeted advertising, public relations efforts, social media, distinct packaging of our retail products, in-store promotions and merchandising, a Worldwide Web site and other efforts. We also acquire knowledge of our users through customer feedback and market research...

  • Page 167
    ..., RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Logitech's shares are listed and traded on both the SIX Swiss Exchange, where the share price is denominated in Swiss francs, and on the Nasdaq Global Select Market, where the share price is denominated in U.S. dollars. The...

  • Page 168
    ... for the Company's shares traded on the SIX Swiss Exchange, as reported by the SIX Swiss Exchange. The U.S. dollar equivalent is based on the noon buying rate on the trading day of the month in which the high or low closing sales price occurred. The noon buying rate is the rate in New York City for...

  • Page 169
    ... own Logitech shares at the time such dividend becomes due. Share Repurchases In fiscal year 2011, we did not purchase any of our equity securities. In September 2008, our Board of Directors approved a share buyback program which authorizes the Company to invest up to $250 million to purchase its...

  • Page 170
    ... the annual return through March 31, 2011. The stock price performance on the following graph is not necessarily indicative of future stock price performance. Comparison of 5 year cumulative total return $160 $140 $120 $100 $80 $60 $40 $20 $2006 Logitech Logitech 2007 2008 2009 2010 2011 Nasdaq...

  • Page 171
    ... be expected in the future. Year ended March 31, 2011 2010 2009 2008 2007 (In thousands, except per share amounts) Consolidated statements of operations and cash flow data: Net sales ...Gross profit ...Operating expenses: Marketing and selling...Research and development...General and administrative...

  • Page 172
    ... "Business". QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments. As a global concern, the Company faces exposure to adverse movements in foreign currency exchange rates...

  • Page 173
    ... on the changes in fair value. The notional amounts of foreign exchange forward contracts outstanding at March 31, 2011 relating to foreign currency receivables or payables were $12.9 million. Open forward contracts as of March 31, 2011 consisted of contracts in British pounds to purchase euros at...

  • Page 174
    ... of these analyses, a 100 basis point decrease or increase in interest rates from the March 31, 2011 and March 31, 2010 period end rates would not have a material effect on the Company's results of operations or cash flows. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL...

  • Page 175
    ... not equal annual basic and diluted earnings per share. The following table sets forth certain quarterly financial information as a percentage of net sales: Year ended March 31, 2011 First Second Third Fourth Year ended March 31, 2010 First Second Third Fourth Net sales ...100.0% Gross profit ...35...

  • Page 176
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  • Page 177
    REPORT ON CORPORATE GOVERNANCE 2011 165 ANNUAl REPORT

  • Page 178
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  • Page 179
    ... and market innovative hardware and software products that enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security and home-entertainment control. Logitech was founded in Switzerland in 1981...

  • Page 180
    ...Company's Annual Report, Invitation and Proxy Statement for the 2011 Annual General Meeting, under the heading "Security Ownership of Certain Beneficial Owners and Management as of June 30, 2011". Name Number of Shares (2) % of Voting Rights(1) Relevant Date Daniel Borel ...Logitech International...

  • Page 181
    ... ownership of options or other derivative securities of the Company, whether privately or publicly traded, by any significant shareholder of the Company that is not a member of the Board of Directors or an executive officer. 1.3 Cross-shareholdings Logitech has no shareholdings in companies that to...

  • Page 182
    ...- For information on Logitech's shareholders' equity as of March 31, 2011 and 2010, refer to the Swiss Statutory Balance Sheets on page 231 of our Annual Report, Invitation and Proxy Statement. During fiscal years 2011, 2010 and 2009, the Company had the following approved share buyback programs in...

  • Page 183
    ... stock options and restricted stock units, including performance-based restricted stock units, to its employees and directors. Please refer to Logitech's Compensation Report included with this Annual Report, Invitation and Proxy Statement, under the heading "Equity Compensation Plan Information...

  • Page 184
    4. Senior Management 4.1 Members of Senior Management The members of our senior management, referred to by Logitech as our "executive officers," are set out below. Guerrino De Luca ...58 Years Old Director since 1998 Chairman of the Board of Directors, Acting President and Chief Executive Officer ...

  • Page 185
    ... named Senior Vice President, Video Business Unit in April 2001, Senior Vice President, Entertainment and Communications in July 2005, Executive Vice President, Products in March 2007 and President, Logitech Europe, in September 2010. Prior to joining Logitech, he was Vice President of Engineering...

  • Page 186
    ... which this Report is a part, for information on Logitech's compensation of its Board members and executive officers, and regarding how and why we make compensation decisions. In addition, for information required to be disclosed under Swiss law regarding compensation during fiscal year 2011 of the...

  • Page 187
    ... the event of termination of service of an executive officer or a change-in-control of Logitech. 175 ANNUAl REPORT Under Swiss law any shareholder who acquires more than 33 1/3% of the voting rights of a Swiss company whose shares are listed in whole or in part in Switzerland is required to make...

  • Page 188
    ... audit partner as of March 31, 2011 is Michael Foley. For purposes of U.S. securities law reporting, PricewaterhouseCoopers LLP, San Jose, California, serves as the Company's independent registered public accounting firm. Please refer to Logitech's Compensation Report included in its Annual Report...

  • Page 189
    ...in Logitech securities by members of Logitech's Board of Directors and executive officers. The reports that we file with the SEC on Forms 3, 4 and 5 may be accessed on our website or on the SEC's website at http://www.sec.gov, and the reports that we file that are published by the SIX Swiss Exchange...

  • Page 190
    ... East FZ-LLC ...Logitech (Streaming Media) SA ...Logitech Hellas MEPE ...Logitech Schweiz AG ...Logi Trading and Services LLC ...Limited Liability Company "Logitech" ...Logi Peripherals Technologies (South Africa) (Proprietary) Limited ...LifeSize Communications Limited ...LifeSize Communications...

  • Page 191
    ......Logitech Australia Computer Peripherals Pty Limited ...Logitech (Beijing) Trading Company Limited ...Logitech Technology (Shenzhen) Consulting Co., Ltd ...Logitech Trading Pvt Ltd ...Logitech Engineering & Designs India Private Limited ... Japan India Taiwan, Republic of China Hong Kong Korea New...

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  • Page 193
    ..., 2011 and 2010 ...Consolidated Statements of Cash Flows - Years Ended March 31, 2011, 2010 and 2009 ...Consolidated Statements of Changes in Shareholders' Equity - Years Ended March 31, 2011, 2010 and 2009 ...Notes to Consolidated Financial Statements ... 182 184 185 186 187 188 181 ANNUAl REPORT

  • Page 194
    ...financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and...

  • Page 195
    .... In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors. We recommend that...

  • Page 196
    LOGITECH INTERNATIONAL S.A. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) Year ended March 31, 2011 2010 2009 Net sales ...Cost of goods sold ...Gross profit ...Operating expenses: Marketing and selling... an integral part of these consolidated financial statements. 184

  • Page 197
    LOGITECH INTERNATIONAL S.A. CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) March 31, 2011 2010 ASSETS Current assets: Cash and cash equivalents ...Accounts receivable ...Inventories ...Other current assets ...Total current assets ...Property, plant and equipment...Goodwill ......

  • Page 198
    ... from share-based compensation ...Loss (gain) on cash surrender value of life insurance policies...In-process research and development...Deferred income taxes and other ...Changes in assets and liabilities, net of acquisitions: Accounts receivable ...Inventories ...Other assets...Accounts payable...

  • Page 199
    ... gain on pension plan, net of tax of $122 . . Total comprehensive income ...Tax benefit from exercise of stock options ...Purchase of treasury shares ...Sale of shares upon exercise of options and purchase rights ...Share-based compensation expense ...March 31, 2010 ...Net income ...Cumulative...

  • Page 200
    ... Swiss holding company with its registered office in Apples, Switzerland, which conducts its business through subsidiaries in the Americas, EMEA (Europe, Middle East, Africa) and Asia Pacific. Shares of Logitech International S.A. are listed on both the Nasdaq Global Select Market, under the trading...

  • Page 201
    ... VSOE or TPE is available. Management judgment must be used to determine the appropriate deliverables and associated relative selling prices. The Company has identified Logitech Revue and the LifeSize video conferencing products as products sold with software components that qualify as multiple...

  • Page 202
    ... future product returns. The Company enters into customer marketing programs with many of our distribution and retail customers, and with certain indirect partners, allowing customers to receive a credit equal to a set percentage of their purchases of the Company's products, or a fixed dollar credit...

  • Page 203
    ... to certain customers. Special pricing discounts are usually offered only for limited time periods or for sales of selected products to specific indirect partners. Management's decision to make price reductions is influenced by product life cycle stage, market acceptance of products, the competitive...

  • Page 204
    ... marketable securities related to a management deferred compensation plan, and auction rate securities collateralized by residential and commercial mortgages. The bank time deposits are classified as cash equivalents, and are recorded at cost, which approximates fair value. The marketable securities...

  • Page 205
    ... equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value due to their short maturities. The Company's trading investments are reported at fair value based on quoted market prices, and available-for-sale securities are reported at estimated fair value. Net...

  • Page 206
    .... Treasury Shares The Company periodically repurchases shares in the market at fair value. Treasury shares repurchased are recorded at cost, as a reduction of total shareholders' equity. Treasury shares held are reissued to satisfy the exercise of employee stock options and purchase rights, and...

  • Page 207
    ...is effective for fiscal years and interim periods within those years beginning after December 15, 2010. Logitech will adopt ASU 2009-28 in the first quarter of fiscal year 2012. The impact of adopting ASU 2010-28 will not be known until the Company performs its evaluations of goodwill impairment. In...

  • Page 208
    ... dilution effect of share-based awards granted, assumed and exercised (in thousands): Year ended March 31 2010 2009 2011 Basic weighted average shares outstanding as of March 31 ...Stock options and RSUs granted ...Stock options and restricted stock assumed in LifeSize acquisition ...Stock options...

  • Page 209
    ...final sale of the investments or realization of proceeds by plan participants is not expected within the Company's normal operating cycle of one year. The marketable securities are recorded at a fair value of $13.1 million as of March 31, 2011, based on quoted market prices. Quoted market prices are...

  • Page 210
    ... products and services. Logitech expects the acquisition to drive growth in video communication for the enterprise and small-to-medium business markets by leveraging the two companies' technology expertise, including camera design, firewall traversal, video compression and bandwidth management...

  • Page 211
    ...year performance period. As of March 31, 2011, approximately $5.6 million has been accrued for this cash incentive. In December 2009, options to purchase 850,000 Logitech shares were issued in connection with the retention and incentive plan. The acquisition has been accounted for using the purchase...

  • Page 212
    ... November 27, 2009, Logitech acquired certain assets from TV Compass, Inc., a Chicago, Illinois-based company providing video software and services for the Web and mobile devices. The acquisition has been treated as an acquisition of a business and has been accounted for using the purchase method of...

  • Page 213
    ... of companies offering a range of earphones for portable-music enthusiasts as well as a line of custom-fit in-ear monitors for music professionals. The acquisition is part of the Company's strategy to expand its portfolio of digital audio products, providing more options for portable music listening...

  • Page 214
    ... Fair values were determined by Company management based on information available at the date of acquisition. The results of operations of Ultimate Ears were included in Logitech's consolidated financial statements from the date of acquisition, and were not material to the Company's reported results...

  • Page 215
    ...amounts as of March 31, 2011 and 2010 (in thousands): March 31, 2011 2010 Accounts receivable: Accounts receivable ...Allowance for doubtful accounts...Allowance for returns ...Cooperative marketing arrangements ...Customer incentive programs ...Pricing programs ...Inventories: Raw materials...Work...

  • Page 216
    ... The following table summarizes the activity in the Company's goodwill account during fiscal years ended March 31, 2011 and 2010 (in thousands): March 31, 2011 2010 Goodwill, beginning balance ...Additions ...Sale of business ...Other adjustments ...Goodwill, ending balance ... $553,462 332 (6,610...

  • Page 217
    ... to goodwill in fiscal year 2010 represents an adjustment of the deferred tax asset recognized in connection with the acquisitions of SightSpeed, Inc. and the Ultimate Ears companies. Logitech maintains discrete financial information for LifeSize and accordingly, the acquired goodwill related to...

  • Page 218
    ...equal to the amount of treasury shares repurchased at year-end. The reserve for treasury shares, which is not available for distribution, totaled $307.6 million at March 31, 2011. Share Repurchases During fiscal years 2011, 2010 and 2009, the Company had the following approved share buyback programs...

  • Page 219
    ...ANNUAl REPORT Termination benefits incurred pursuant to the 2009 Restructuring Plan were calculated based on regional benefit practices and local statutory requirements. Asset impairments were recorded to write down fixed assets that were not placed in service due to the abandonment of the related...

  • Page 220
    ... and over four years for employees. All stock options under this plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant. Time-based RSUs granted to employees under the 2006 Plan vest in four equal annual installments on the...

  • Page 221
    ...shares purchased under the Company's employee purchase plans was estimated using the Black-Scholes-Merton option-pricing valuation model applying the following assumptions and values: Year ended March 31, 2011 2010 Purchase Plans 2009 2011 2010 Stock Option Plans 2009 Dividend yield...Expected life...

  • Page 222
    The following table presents the weighted average grant-date fair values of options granted and the expected forfeiture rates: Year ended March 31, 2011 2010 2009 Purchase Plans 2011 2010 2009 Stock Option Plans Weighted average grant-date fair value of options granted ...Expected forfeitures ... ...

  • Page 223
    ...of Logitech's daily closing share price over a look-back period equal to the years of expected life. The risk free interest rate is derived from the yield on US Treasury Bonds for a term of the same number of years as the expected life. As of March 31, 2011, the grant date fair values of outstanding...

  • Page 224
    ... 31, 2011 and 2010 was $60.2 million and $46.3 million. The following table presents the changes in the fair value of defined benefit pension plan assets for fiscal years 2011 and 2010 (in thousands): March 31, 2011 2010 Fair value of plan assets, beginning of year ...Actual return on plan assets...

  • Page 225
    ...11,749) 936 $(10,813) Changes in accumulated other comprehensive loss related to the defined benefit pension plans were as follows (in thousands): March 31, 2011 2010 Accumulated other comprehensive loss, beginning of year ...Transition obligation recognized ...Prior service cost recognized...Loss...

  • Page 226
    ...million to its defined benefit pension plans during fiscal year 2012. Deferred Compensation Plan One of the Company's subsidiaries offers a management deferred compensation plan which permits eligible employees to make 100%-vested salary and incentive compensation deferrals within established limits...

  • Page 227
    ... technological investment in China. The tax holiday decreased income tax expense by approximately $3.6 million, $2.4 million, and $4.0 million for fiscal years 2011, 2010 and 2009. The benefit of the tax holiday on net income per share (diluted) was approximately $0.02, $0.01 and $0.02 in fiscal...

  • Page 228
    ... 31, 2011 includes a tax benefit of $2.2 million related to the U.S. federal research tax credit. The U.S. state of California has enacted legislation affecting the methodology which must be used by corporate taxpayers to apportion income to California. These changes will become effective for our...

  • Page 229
    Deferred tax assets relating to tax benefits of employee stock option grants and RSUs have been reduced to reflect exercises in fiscal years 2011 and 2010. Some exercises resulted in tax deductions in excess of previously recorded benefits based on the option value at the time of grant ("windfalls...

  • Page 230
    ... contracts are recognized in earnings based on the changes in fair value. The notional amounts of foreign exchange forward contracts outstanding at March 31, 2011 and 2010 relating to foreign currency receivables or payables were $12.9 million and $15.1 million. Open forward contracts as of March 31...

  • Page 231
    ... presents the fair values of the Company's derivative instruments and their locations on the Balance Sheet as of March 31, 2011 and 2010 (in thousands): Asset Derivatives Fair Value Location March 31, 2011 2010 Liability Derivatives Fair Value Location March 31, 2011 2010 Derivatives designated...

  • Page 232
    ...870 6,962 14,267 $ 72,591 Rent expense was $19.8 million, $16.3 million and $15.5 million for the years ended March 31, 2011, 2010 and 2009. In May, 2011 we signed a new lease for facilities which will house our Americas operations in Northern California, replacing our leased facilities in Fremont...

  • Page 233
    ... is limited to purchases of specified components from the named suppliers. The Company does not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee arrangements. Logitech International...

  • Page 234
    ... District Court for the Southern District of New York on behalf of individuals who purchased Logitech shares between October 28, 2010 and April 1, 2011. The complaint relates to Logitech's disclosure on March 31, 2011 that its results for fiscal year 2011 would fall below expectations and seeks...

  • Page 235
    ... 17 - Segment Information Net sales by product family, excluding intercompany transactions, were as follows (in thousands): Year ended March 31, 2010 2011 2009 Retail - Pointing Devices ...Retail - Keyboards & Desktops ...Retail - Audio ...Retail - Video ...Retail - Gaming...Retail - Digital Home...

  • Page 236
    ... and $282.9 million in fiscal years 2011, 2010 and 2009. Compensation and Security Ownership of Board Members and Executive Officers In accordance with the Swiss Code of Obligations, the compensation and security ownership of members of the Board of Directors of Logitech International S.A. and of...

  • Page 237
    ... life held by the Company in connection with the Company's management deferred compensation plan. The Company surrendered the life insurance contract for cash in December 2010. In fiscal year 2010, a bonus was granted to an executive officer to enable him to purchase a value of Logitech shares equal...

  • Page 238
    ... of the Board of Directors or executive officers. In addition, no compensation was paid or loans made during fiscal years 2011, 2010 and 2009 to parties closely related to members of the Board of Directors or executive officers. The following table sets forth the shares and options held by each...

  • Page 239
    ... the Swiss franc to U.S. dollar conversion rate on the trading day immediately preceding the grant dates. The range of the U.S. dollar exercise prices as of March 31, 2011 was $16.04 - $37.63. Risk Assessment At a company-wide level, Logitech's internal audit function coordinates management's risk...

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  • Page 241
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY FINANCIAL STATEMENTS 229 ANNUAl REPORT

  • Page 242
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY FINANCIAL STATEMENTS TABLE OF CONTENTS Page Swiss Statutory Balance Sheets (unconsolidated) ...Swiss Statutory Statements of Income (unconsolidated) ...Notes to Swiss Statutory Financial Statements ...Proposal of the Board of Directors for ...

  • Page 243
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY BALANCE SHEETS (unconsolidated) (In thousands of Swiss francs) March 31, 2011 2010 ASSETS Current assets: Cash ...Short-term bank deposits ...Accrued interest and other receivables...Advances to and amounts receivable from group companies ......

  • Page 244
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY STATEMENTS OF INCOME (unconsolidated) (In thousands of Swiss francs) Year ended March 31, 2011 2010 Dividend income ...Royalty fees ...Interest income from third parties ...Interest income from subsidiaries ... CHF 35,332 25,562 614 12,598 74,106...

  • Page 245
    ... is limited to CHF 6,407,800. As of March 31, 2011, CHF 4,471,000 was outstanding under these guarantees. Note 3 - Investments: Principal operating subsidiaries include the following: % of possession Company Country Currency Share capital Purpose Logitech Europe S.A... Switzerland 100 CHF...

  • Page 246
    ... Swiss Code of Obligations, management has opted to record the treasury shares at a value below the lower of cost or market value. The disposal of treasury shares during the period was to the Holding Company's directors and employees under the Holding Company's share option and share purchase plans...

  • Page 247
    ... public in Switzerland. Logitech has not been notified of any ownership of options or other derivative securities of the Company, whether privately or publicly traded, by any significant shareholder of the Company that is not a member of the Board of Directors or an executive officer. ANNUAl REPORT...

  • Page 248
    ... Note 8 - Compensation and Security Ownership of Board Members and Executive Officers: In accordance with the Swiss Code of Obligations, the compensation and security ownership of members of the Board of Directors of Logitech International S.A. and of Logitech executive officers is presented in the...

  • Page 249
    ... the Board of Directors for appropriation of retained earnings was as follows during fiscal years 2011 and 2010 (in thousands): Year ended March 31, 2011 2010 To be carried forward ... Proposal of the Board of Directors CHF 507,730 Resolution of the General Assembly CHF 349,312 237 ANNUAl REPORT

  • Page 250
    ...financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and...

  • Page 251
    ... independence. In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. We further confirm that...

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  • Page 255
    ... chairman of the Board Logitech Matthew Bousquette chairman EGI holdings LLc Erh-Hsun Chang Former Senior Vice President, Worldwide operations and General Manager, Far East Logitech Kee-Lock Chua President and chief Executive officer Vertex Group Sally Davis chief Executive officer Bt Wholesale Neil...

  • Page 256
    SIX: LoGN-VX NASDAQ: LoGI For more information about Logitech and its products, please visit our web site: www.logitech.com.